Desperately Searching for a Mentor

[alan5616]

Hi Carryon,

Thanks for your reply. I totally understand your response. Since the start of this thread I've made so much headway in studying and practicing that I can feel the truth in your reply directly in my bones. I go through periods of hopelessness, but all in all, I haven't proven to myself that I've tried everything, and so, I'll keep trying. I'll continue studying and practicing. I think it's important to understand the Greeks from the perspective of risk management because if the trader is able to hedge their position it won't matter if they make profit. The other thing I'm focusing on is entry. Good entry combined with adequate risk management may not get me a profit but should (theoretically) reduce or eliminate the loss. I'm okay with starting there. Can you recommend a good software and/or book to further the learning and practice?

Thanks again for your input.

Trading options is a complex business. Those, whom I know, that make money from it, are option sellers. In many cases, they own the stock and sell call options to increase their annual return by collecting the option premiums.

However, my particular forte is in trading forex. It can be very profitable provided that you establish a sensible risk/reward ratio and have clear entry/exit strategies.

 

[-Catalin-]

Hi Carryon,

Thanks for your reply. I totally understand your response. Since the start of this thread I've made so much headway in studying and practicing that I can feel the truth in your reply directly in my bones. I go through periods of hopelessness, but all in all, I haven't proven to myself that I've tried everything, and so, I'll keep trying. I'll continue studying and practicing. I think it's important to understand the Greeks from the perspective of risk management because if the trader is able to hedge their position it won't matter if they make profit. The other thing I'm focusing on is entry. Good entry combined with adequate risk management may not get me a profit but should (theoretically) reduce or eliminate the loss. I'm okay with starting there. Can you recommend a good software and/or book to further the learning and practice?

Thanks again for your input.

Option Volatility and Pricing by Sheldon Natenberg was quite helpful but in my opinion you’ll get more out of getting hold of some options pricing sheets with greeks on so you can make your own charts. Once you are familiar with the effect of time vol and underlying movement on the price of the options, repeat the process for spreads. Its an absolute headache but it will help you recognise why some spreads move at different rates to others or even why sometimes you’d buy calls, the underlying market would rise and yet your p&l would laugh at you.

 

[Shawty_]

Hello Dear Fellow Traders,

What approach do you take to set up a Butterfly Spread? How do work through the strike spread? Higher spread = higher profits, but also = higher cost, and how can you ensure your short strike is at price at expiration? Looking for some advice from experienced butterfly spread traders. Thank you.